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An unconventional choice for the PSC

One of my standard jokes is that if the governor ever put editorial writers and newspaper columnists in charge of Florida, the state would sink into the ocean the next day.

Now he's gone and done it.

The newest member of the Florida Public Service Commission, David E. Klement, was the editorial page editor of the Bradenton Herald for 30 years.

After leaving the Herald, Klement spent two years as director of the Institute for Public Policy and Leadership at the University of South Florida's Sarasota campus.

So, how did he become one of Florida's five utility regulators? Did he use inside connections, pull strings?

Actually, Klement says, he read about the PSC vacancies in the news, went online and filled out an application.

"It was kind of a wild card," he says. "I thought there was no way I would be selected."

The selection of PSC members can be intensely political, influenced by the Legislature and industry pressure.

But unusual events were working in Klement's favor. The PSC was in the middle of a scandal — the latest in a long series — over closeness between the regulators and the companies they regulate.

Gov. Charlie Crist decided to clean house by refusing to reappoint two PSC members whose terms were ending. He chose Klement and another newcomer (a topic for another day). When one of the incumbents resigned early, Crist put Klement on the commission even sooner.

So far, the biggest decision by the PSC with Klement aboard has been to delay the major rate increases requested by the state's two biggest electric utilities, Florida Power & Light and Progress Energy Florida. During the delay, Klement will be reading thousands of pages of testimony and exhibits.

I asked Klement about the PSC scandals, mostly involving close contacts between the commission or its staff with the regulated companies. "I'm going to try to avoid them at all costs," he said.

As for whether he is a "pro-consumer" or a "pro-utility" regulator, Klement gave the right answer: The commission's job, often misunderstood, is to strike a balance. Utilities are entitled to a fair profit so they can continue to grow and serve the state. The PSC's job is not to keep rates, as politicians sometimes claim, "as low as possible."

But that's the tricky part. It's doubtful there's a single member who ever served on the PSC who wouldn't claim that he or she set "fair" rates. The better question is whether the commission, as an institution, has traditionally been more sympathetic to utilities than consumers.

The PSC environment is incredibly insular. Really, the only people who fully understand what the commission does are its members, the staff — and the regulated companies. They are fellow captives.

There were a few scoffers in the blogosphere when Crist chose Klement. What does some editorial writer know? What is his expertise in accounting, in capital requirements, in rates of return?

But, you know, we've had plenty of those kinds of "experts" over the years — many of them now happily employed by the companies they once regulated.

Here's hoping that a 69-year-old generalist in public policy, not trying to get rich in his next career gig, old enough to know his own mind, with 30 years' experience in knowing when people are throwing bull at him, turns out not to be such a bad pick.

An unconventional choice for the PSC 11/04/09 [Last modified: Wednesday, November 4, 2009 6:13pm]
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